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•According to McClatchy-Tribune Information Services, a detection system that was expanded following the 2004 Indian Ocean tsunami has experienced significant outages and can no longer be relied on to detect giant waves as they approach the U.S. coastline, areport from the National Research Council finds. (See item 47)

47. October 3, McClatchy Tribune Information Services – (National) Revamped U.S. tsunami warning system unreliable, report finds. A detection system that was expanded following an Indian Ocean tsunami that killed 230,000 people has experienced significant outages and can no longer be relied on to detect the giant waves as they approach the U.S. coastline, a new report finds. The system, known as DART, or Deep-ocean Assessment and Reporting of Tsunamis, was expanded from six deep-ocean buoy stations to 39 in the months following the massive 2004 earthquake off Indonesia that spawned killer waves that washed ashore as far away as the east coast of Africa. Though there are DART buoys in the Atlantic and the Caribbean, most of them are located around the Pacific Ocean’s “Ring of Fire” to give advance warning to Washington, Oregon, California and Alaska, where a tsunami landfall is thought more likely. But at any given time, 30 percent or more of the buoys have been inoperable, according to a recent report from the National Research Council. An alarming number of buoys have broken their moorings and drifted away. The buoy stations have also suffered failures in sensors that can detect a sea level rise of as little as one-third of an inch. Other systems on the sophisticated buoy stations have also had problems. “As a consequence of the pervasive outages of DART stations, the Tsunami Warning Centers cannot depend on the DART network for tsunami forecasting,” said the report, which was requested by Congress. Source: http://www.miamiherald.com/2010/10/03/1854853/revamped-us-tsunami-warning-system.html

•Inspections have been ordered for seven dams that may have been damaged by an earthquake that rattled four central Nebraska counties September 26.(See item 62)

62. October 2, Associated Press – (Nebraska) NRD orders inspections for dams near Neb. quake. Inspections have been ordered for seven dams located near the epicenter of an earthquake that rattled four central Nebraska counties. Officials with the Central Platte Natural Resources District (NRD) are worried that the September 26 quake may have damaged seven dams between Cozad and Lexington. The U.S. Geological Survey has said the quake had a magnitude of 3.0, with the epicenter 6 miles southwest of Oconto in southern Custer County. It also could be felt in Dawson, Gosper and Lincoln counties. The NRD’s general manager said heavy rains earlier this year washed out some of the earthen dams, so there’s concern about earthquake damage. Source: http://www.nebraska.tv/Global/story.asp?S=13257879

Details

Banking and Finance Sector

20. October 4, ComputerWorld – (International) Money mule arrests highlight banks’ efforts to fight fraud. The indictments unveiled last week against dozens of people who allegedly helped loot millions of dollars from U.S. businesses via online corporate account takeovers highlights the struggle by financial firms to fight fraud. Over the past 2 years, corporate account takeovers by cybercriminals have cost U.S. businesses more than $100 million, according to FBI estimates. In most cases, the thefts have been perpetrated by gangs in Eastern Europe who used the Zeus banking Trojan to break into computers belonging mainly to small businesses and small municipalities. The malware has been used to steal online banking credentials and access corporate accounts so the thieves could transfer money into fraudulent accounts set up by hundreds of U.S.-based accomplices, often called “money mules.” Most of the illegal transfers were unauthorized Automated Clearing House (ACH) transactions from the victim’s account to the money mule. The U.S Attorney’s Office in New York City said September 30 it had indicted 37 such money mules for helping crooks based in Russia and several East European countries siphon off more than $3 million in stolen funds. In a joint announcement, Manhattan’s District Attorney announced indictments against another 36 people for their participation in a similar operation. Source: http://www.computerworld.com/s/article/9189201/Money_mule_arrests_highlight_banks_efforts_to_fight_fraud

21. October 3, Eastern North Carolina Today – (North Carolina) Phone scam alert. In the wake of the recent significant rainfall in the eastern North Carolina area, Progress Energy has been flooded with calls regarding power outages and downed lines. However, residents must be wary of calls claiming to be from the electric company. Progress Energy officials are warning customers about a telephone-based scam, affecting more than a dozen customers since September 28. In at least one case, credit card information was supplied, and the information was later used illegally. The caller, sometimes identified as “Dan,” claims the customer’s account is about to be disconnected for non-payment, and requests credit card information from the customer to avoid the disconnection. A spokesperson for the Kinston Department of Public Safety, said he wasn’t aware of the Progress Energy scam, but warned people should never give important information to strangers over the phone. Source: http://www.enctoday.com/news/information-68634-kfpress-energy-calls.html

22. October 2, Bank Info Security – (National) Two banks fail on Friday, Oct. 1. Federal and state banking regulators closed two banks October 1. These bank failures raise the total number of failed institutions to 146 so far in 2010. Wakulla Bank, Crawfordville, Florida, was closed by the Florida Office of Financial Regulation, which appointed the Federal Deposit Insurance Corp. (FDIC) as receiver. The FDIC entered into a purchase and assumption agreement with Centennial Bank, Conway, Arkansas, to assume all of the deposits of Wakulla. The cost to the FDIC Deposit Insurance Fund (DIF) is estimated to be $113.4 million. Shoreline Bank, Shoreline, Washington, was closed by the Washington Department of Financial Institutions, which appointed the FDIC as receiver. The FDIC entered into a purchase and assumption agreement with GBC International Bank, Los Angeles, to assume all deposits of Shoreline Bank. The cost to the DIF is estimated to be $41.4 million. Source: http://www.bankinfosecurity.com/articles.php?art_id=2971

23. October 2, Wall Street Journal – (International) Hackers siphoned $70 million. An international computer-crime ring that was broken up this week siphoned about $70 million in a hacking operation targeting bank accounts of small businesses, municipalities and churches, the FBI said October 1. FBI officials provided new details of a broad probe that included the arrests earlier in the week of people allegedly involved in a network of “mules,” those recruited to move stolen funds via bank accounts opened with fake names. Authorities in the U.S., U.K., the Netherlands, and Ukraine have detained or charged more than 100 people. According to the FBI, the organization running the hacking ring included computer-code writers in Ukraine, and the mule-network operators spread out in the U.S., U.K., and Ukraine. Victims were mostly in the U.S., though some bank accounts were also targeted in the U.K., the Netherlands, and Mexico. Thieves using iterations of the Zeus computer program managed to steal hundreds of thousands of dollars at a time — the result of focusing on business accounts instead of individual consumers, the FBI said. Investigators said the transactions attempted could have led to losses of up to $220 million, but many were not completed. Source: http://online.wsj.com/article/SB10001424052748704029304575526393770024452.html?mod=googlenews_wsj

24. October 2, Grand Rapids Press – (Michigan) Taco Bell credit card ‘skimming’ scam larger than first thought. Between 50 and 100 people were affected by a credit card scam that allegedly involved two Taco Bell employees in the Grand Rapids, Michigan-area using “skimming” devices to copy card numbers, an investigator said October 1. A detective said his investigation shows the scope of the scam is much larger than the three victims initially found. Probable cause hearings began October 1 for a 36-year-old of Byron Center, and a 38-year-old, of Caledonia. Police said the two men masterminded the operation with two Taco Bell employees, who have not yet been charged. According to police, the two suspects, who worked for a landscaping company, gave skimming devices to two Taco Bell employees who used the black boxes to swipe and collect credit cards numbers. Police would not say which local restaurants were involved, but the scam likely lasted several weeks, court documents said. Source: http://www.mlive.com/news/grand-rapids/index.ssf/2010/10/taco_bell_credit_card_skimming.html

25. October 1, ComputerWorld – (National) Regulators blame computer algorithm for stock market ‘flash crash’. The U.S. Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) October 1 released a joint report blaming an automated trade execution system for the May 6 stock market “flash crash” that affected trading worldwide. According to the two agencies, an automated trade execution system flooded the Chicago Mercantile Exchange’s Globex electronic trading platform with a large sell order that caused the Dow Jones Industrial Average to plunge by almost 1,000 points in a half hour, wreaking havoc on an already stressed market. Twelve days after the crash, the SEC and CFTC jointly released a preliminary report on the events of that day. The report confirms much of what was found in the preliminary investigation. Source: http://www.computerworld.com/s/article/9189179/Regulators_blame_computer_algorithm_for_stock_market_flash_crash_

Information Technology

48. October 4, The H Security – (International) Study: Many free iPhone apps pass device ID to the app vendor. It is not just Android apps that transmit users’ personal data to vendors –- iPhone app developers also appear to gather user data. According to a study by pskl.us blogger, a number of free iOS apps send private user data back to their application developers. The blogger examined 57 free news, shopping, business and finance applications, including the top 25 free apps from the US iTunes App Store. He found that 68 percent of the applications tested transmitted the software-readable unique device identifier (UDID) each time the application was launched. The data was transmitted to servers controlled by the relevant application vendor. A further 18 percent of apps transmitted encrypted data, meaning that there is no easy way of knowing what data they are forwarding to the vendor. According to the blogger’s analysis, just 14 percent of applications are “clean”. The blogger notes that, where the user name for a user account is also known, the UDID allows many applications to draw conclusions about the identity of the iPhone user. As an example, he cites the Amazon app, which stores the phone’s serial number on mail order company Amazon’s servers. The full text of the study, entitled “iPhone Applications & Privacy Issues: An Analysis of Application Transmission of iPhone Unique Device Identifiers (UDIDs)”, is available online. The list of apps tested can be found in Appendix A on page 16. Source: http://www.h-online.com/security/news/item/Study-Many-free-iPhone-apps-pass-device-ID-to-the-app-vendor-1100828.html

49. October 4, The Register – (International) Anti-virus vendor trio plug website flaws. White-hat hackers have uncovered vulnerabilities on the Web sites of anti-virus firms that created a phishing risk. Cross-site scripting (XSS) bugs of varying severity were found on the Web sites of Symantec, Eset, and Panda Security by Team Elite, the white-hat hackers who discovered the flaws. The Register notified all three firms of the issue and all three responded by plugging the flaws in good time. Coding errors that give rise to cross-site scripting flaws are endemic in Web development. This class of vulnerability might, for example, allow a hacker to present content from third-party sites (pop-ups, malicious scripts etc.) as if it came from a site a surfer was trying to visit and that site alone. As such, these flaws are very handy for phishing attacks that attempt to trick the unwary into handing over their credentials to untrusted sites. Source: http://www.theregister.co.uk/2010/10/04/anti_virus_vendor_xss_snafu/

50. October 4, The Register – (International) Ministry of Sound floored by Anonymous. Ongoing denial of service attacks spearheaded by the group, Anonymous, have knocked out the Web site of Great Britain’s Ministry of Sound, as well those of its payment provider and solicitors, Gallant Macmillian. Macmillan is attempting to identify and sue individuals who allegedly uploaded music from the Ministry of Sound’s music catalog. Slyckr reported that the attacks against the MoS and Associated Web site started the evening of October 3. The sites remained unavailable the morning of October 4. Its legal action marked the Ministry of Sound as a candidate for attacks launched by the loosely affiliated Anonymous collective against the entertainment business and, in particular, organizations that harass alleged file-sharers. Operation Payback: is a “expletive”, which began 2 weeks ago, has already floored the websites of the Motion Picture Association of America, the Recording Industry Association of America, and ACS:Law. Source: http://www.theregister.co.uk/2010/10/04/ministry_of_sound_ddos/

Communications Sector

51. October 3, Reuters – (National) Verizon to issue refunds to 15 million customers. Verizon Wireless in a statement October 3 said it will pay up to $90 million in refunds to 15 million cell phone customers who were erroneously charged for data sessions or Internet use. Verizon said 15 million customers either will receive credits of $2 to $6 on their October or November bills, while former customers will get refund checks. The charges affected customers who did not have data usage plans, but were billed because of exchanges initiated by software built into their phones. In the past 3 years, the U.S. Federal Communications Commission (FCC) received complaints from Verizon Wireless customers who said they were charged for data usage or Web access, the New York Times reported October 3. People close to the settlement talks said they expected the refunds to total more than $50 million, the Times said. These people also said the FCC is pressing Verizon to agree to a penalty for the unauthorized charges. Source: http://www.msnbc.msn.com/id/39491340/ns/business-us_business/

52. October 2, KTVI 2 St. Louis – (Illinois) Man stealing copper is electrocuted. The Ameren substation in Washington Park, Illinois is in an abandoned industrial area not far from a railroad yard. Thieves attempting to steal copper wire may have thought it was a safe target, but the high voltage lines running into the substation were highly dangerous. One would-be thief made a fatal mistake October 2, when police said, the man was believed to be trying to steal telephone line. “The investigation showed that apparently the subject was involved in attempting to cut down power lines, which one of the lines was fully charged and he was electrocuted,” said a Washington Park police chief. Nearly 500 customers lost power for 5 to 6 hours because of the outage. Ameren Illinois restored electric service after police collected evidence from the crime scene. Source: http://www.fox2now.com/news/ktvi-man-stealing-cooper-electrocuted-100210,0,6517017.story

53. October 1, WBTV 3 Charlotte – (South Carolina) Copper thieves cause major damage during heist in Rock Hill. Police in South Carolina are looking for suspects responsible for a copper theft that caused $200,000 worth of damage to a York County Communications tower in September. The Rock Hill Police Department said thieves stole $1500 worth of copper from the tower in the 1800 block of Canterbury Glen in Rock Hill, sometime between September 9 and September 29. An employee was making a monthly inspection of the tower when he discovered the damage. This investigation is ongoing. Source: http://www.wbtv.com/Global/story.asp?S=13252869

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About Me

U.S. Army Retired Chief Warrant Officer with more than 40 years in information technology and 35 years in information security. Became a Certified Information Systems Security Professional in 1995 and have taught computer security in Asia, Canada and the United States. Wrote a computer security column for 5 years in the 1980s titled "for the Sake Of Security", penname R. E. (Bob) Johnston, which was published in Computer Decisions.
Motto: "When entrusted to process, you are obligated to safeguard"